\u3000\u30 Beijing Telesound Electronics Co.Ltd(003004) 60 Guangdong Faith Long Crystal Technology Co.Ltd(300460) )
Investment summary
5g penetration speed-up, increasing the demand for high fundamental frequency / miniaturized crystal oscillator. 5g base stations in the downstream market have achieved full coverage, and the penetration rate of 5g mobile phones has increased rapidly, promoting the iteration of crystal oscillator products to high-frequency and miniaturization technology, and driving the demand of relevant models of crystal oscillator. According to the prediction of Taiwan crystal technology, the global demand for small-size crystal oscillators is expected to increase from 1.185 billion in 2020 to 5.008 billion in 2030, cagr15.5 billion 5%。 The unit price of high fundamental frequency / miniaturized crystal oscillator is generally higher than that of ordinary crystal oscillator Guangdong Faith Long Crystal Technology Co.Ltd(300460) has mastered the key lithography technology of high frequency, and its products are competitive in miniaturization. It is one of the few manufacturers certified by Qualcomm in the world. In the future, with the release of the new capacity of Chongqing plant, the company’s high frequency / miniaturization products are expected to promote the company’s volume and price rise.
The penetration of electric intelligent vehicles has significantly increased the demand for vehicle specification level crystal oscillators. The demand of new energy vehicles for car size crystal oscillator is about 100150, which is higher than the configuration of 30-40 ordinary economical vehicles, and the standard requirements for heat resistance, vibration resistance and impact resistance of car size crystal oscillator are higher, resulting in the price of car size crystal oscillator is higher than that of consumer products of the same size, so the added value and gross profit margin are also higher. The company focuses on the layout of car gauge Jingzhen. Its products have passed the factory review of Byd Company Limited(002594) and other well-known Chinese car enterprises. Car gauge Jingzhen is expected to become a new profit growth point of the company.
The opportunity to replace high-end crystal oscillator has come, and the domestic replacement is just in time. In the past few years, the market share has shifted from Japanese manufacturers to enterprises in Chinese Mainland and Taiwan, China. Chinese local manufacturers have cost, market and customer advantages. As they catch up with Japanese / Taiwan enterprises in high-end crystal oscillator technology and product research and development, each manufacturer has made breakthroughs.
Chongqing expanded its production and seized the market share of medium and high-end products. The company has actively expanded its production capacity. The new Chongqing project focuses on the layout of high fundamental frequency and miniaturized products. Phase 1 of the project has reached the expected production capacity, and the production capacity of crystal oscillator has been increased by 700800 million / year, so as to meet the large demand for high-end crystal oscillator in the downstream market; After the completion of phase 2 project, the production capacity will be increased by 500600 million pieces / year. At present, some equipment has arrived at the plant and is under commissioning. The company’s overall production capacity is expected to increase by 1 billion this year. Chongqing project has laid the momentum of performance growth and is expected to help the company seize the market opportunity of domestic substitution.
Profit forecast
“Overweight” rating is given for the first time. We expect that the net profit attributable to the parent company in 202224 will be RMB 121 / 192 / 239 million, with a year-on-year increase of 3.6% / 58.7% / 24.5%, corresponding to EPS of 0.43/0.69/0.86, and PE valuation of 22-24 will be 26.56/16.73/13.44 times. As a leading manufacturer in China’s crystal oscillator industry, the company has mastered the core process lithography technology, and the Chongqing project helps to seize the medium and high-end crystal oscillator market. It is expected to seize the domestic substitution opportunity and achieve high growth.
Risk tips
Localization substitution is less than expected, product price fluctuation and market competition are intensified
